Define Operating income approach

Describe briefly Operating income approach?

E

Expert

Verified

Operating income approach is the approach that proposes the decision of capital structure in the direction of a firm is immaterial and change in leverage or debt does not result in change of total and market price of the firm. It tells that entire cost of capital is independent of degree of leverage. This approach was also formed by David Durand.

   Related Questions in Business Economics

  • Q : Illustrate Qualification in

    Illustrate Qualification in International Trade?

  • Q : Explain the markets and prices of the

    Explain the markets and prices of the Market System?

  • Q : Illustrate the changes in Demand

    Illustrate the changes in Demand, Supply and Equilibrium?

  • Q : Limitation of intermediaries for

    Intermediaries do not classically: (w) reduce transaction costs. (x) absorb risk. (y) try to make profits. (z) cause prices to be more volatile. I need a good answer on the topic of Economic problems. Please give m

  • Q : What do you mean by Shuffling the Deck

    What do you mean by Shuffling the Deck?

  • Q : What are the main sources of growth

    What are the main sources of growth?

  • Q : Introduction of the term combined

    Give a brief introduction of the term combined leverage? And in what manner it is calculated?

  • Q : Relation of increased productivity by

    Discussion of a pin factory by Adam Smith focused upon the increased productivity related along with: (w) free international trade as per absolute advantage. (x) specialization and the division of labor. (y) free international trade as per comparative advantage. (z) certainty abo

  • Q : Speculation and intermediary operations

    Transaction costs tend to be decreased, prices to consumers are classically stabilized and lowered, and economy-wide efficiency is generally improved through: (1) rigid wage and price controls. (2) central planning that fosters monopo

  • Q : Explain the shapes of the

    Specify and explain the shapes of the marginal-benefit and marginal-cost curves and use these curves to determine the optimal allocation of resources to a particular product.  If current output is such that marginal cost exceeds marginal benefit, should more or l

©TutorsGlobe All rights reserved 2022-2023.